Moody Analytics says passing the $579-billion “hard” infrastructure bill will do a lot more good for the economy if passed alongside the Democrats’ $3.5-trillion reconciliation package:
The report, penned by Moody’s Chief Economist Mark Zandi, says that enacting the $579 billion “hard” infrastructure piece —with money for roads, bridges, transit, rail service, broadband and more — on its own would actually be a drag on growth in the short term because some of the offsets would take effect immediately while the spending is slower to roll out. But by 2023, inflation-adjusted economic growth would be 0.6 percentage point higher, with 650,000 new jobs created by mid-decade.
If lawmakers follow up with the $3.5 trillion budget reconciliation package under discussion, any negative growth effects in 2022 would be canceled out and real economic growth could be nearly 1 percentage point higher, Moody’s said [Laura Weiss, “Moody’s: Infrastructure, Budget Packages Will Boost Growth, Jobs,” Roll Call, 2021.07.21].
Rather than fueling inflation, this combination of constructive legislation would simply complete our recovery from the pandemic recession:
Worries that the plan will ignite undesirably high inflation and an overheating economy are overdone. The fiscal support it provides is only sufficient to push the economy back to full employment from the recession caused by the COVID-19 pandemic,” he wrote [Michael Schnell, “Zandi Argues Spending Packages Will Help Economy, Rejects Inflation Concerns,” The Hill, 2021.07.21].
Broad investments in infrastructure will also make up for past neglect and fortify our economy against climate change:
The nation has long underinvested in both physical and human infrastructure and has been slow to respond to the threat posed by climate change, with mounting economic consequences. The bipartisan infrastructure deal and reconciliation package help address this. Greater investments in public infrastructure and social programs will lift productivity and labor force growth, and the attention on climate change will help forestall its increasingly corrosive economic effects [Mark Zandi and Bernard Yaros Jr., “Macroeconomic Consequences of the Infrastructure and Budget Reconciliation Plans,” Moody’s Analytics, 2021.07.21].
Building roads, bridges, water systems, and other hard infrastructure will strengthen our economy. Supporting that building with more comprehensive investments in human infrastructure will strengthen our economy even more.
An evaluation like this coming from an organization like Moody’s ought to make even “centrists” and “conservatives” eager to invest in America. Financial institutions like banks rely on Moody’s; it’s not some socialist hippie group. (And who cares if it were? They’d still be right.)
But of course there will be excuses. There are always excuses. Spend money for bombs and wars? Sure, that’s free! Spend money on roads, bridges, education, health care, the electrical grid, water? BuT hOw wiLL YoU pAy fOR iT?
The problem I see with big infrastructure bills is that a lot of stuff gets dumped in just to secure votes. I’m fine with infrastructure the needs updating and developing the infrastructure of the future, but I want to know what the hell I’m buying before a take out my checkbook or credit card. Until them, I’m a no.
A decade or so, it was the road to nowhere. Right now Republicans don’t want to spend much on climate change solutions, which I think are really needed. Republicans are more than willing to dump ridiculous amounts of money into fantasyland projects like new nuclear power plants, so they hype them as carbon free. Ha. Some Democrats are even buying into the nuclear mythmaking, because the nuclear-government complex always contributes to whomever has the power, and by power I mean political power. We’re still dealing with the big nuclear scam from the Bush presidency, where money was funneled to construct new nuclear power plants. One of them is so vastly over cost that it is looking for new bailouts. The others went belly up. But they created jobs for the lobbyists, if nothing else.
well…we built the interstate and now, 50 years later, we have to repair and replace it, especially bridges. South Dakota is one of the few states where your county highways are not paved. A giant road paving project in rural South Dakota would be real progress and enable the forgotten parts of the state to experience some progress. More than that, we need to move beyond gasoline as a means of transportation and stay up with the rest of the country with our internet. Big projects but really no bigger than the original interstate or the transcontinental railroad, the Homestead Act or the building of the A Bomb were at the time.
If my choice is between necessary infrastructure with the occasional “bridge to nowhere” thrown in vs. paying for unending wars and fighter jets that can’t fly in the rain, I know which option I’m choosing.
Ideally the government would only fund the projects I like, putting unlimited money toward them, and funding nothing I disapprove of. For some strange reason, that option is never presented to me.
Will they be printing more money to pay for this? If the answer is yes, we will have inflation. The money supply is basically separate from the things we need to pay for, regardless of how justified those things may be to the electorate, it comes down to the money supply. Six dollar meals are now nine dollars, we’ve already had mass devaluation of our dollar. There is never a free lunch, however, creating new infrastructure is a lot better than giving money to people who have no desire to go back to work. They just want the free money. There are a lot of people who want the free government money so they can stay home, until that either goes away or wages get high enough to get them off the couch.
Mr. camper is righter than right. Free government money is bad, it is very bad.
Although you can get a free breakfast when you breakfast with grudznick.
Magats will just cut taxes since we all know taxcuts pay for themselves, even though they don’t.
I’ll take that “free breakfast” grudzie.
Where and when?
Arlo, over-paving rural roads in the depopulating counties is a loser. Many county roads and state highways never should have been paved. The counties and state lack the population base and taxable base to keep up with their maintenance. (Recall the generous tax give-aways for “agriculture” – ensuring they do not pay their fair share for the roads used.) Sioux Falls and Rapid City should not have to pay for county or state road maintenance in Harding County. As Iowa counties depopulate they are reverting county roads to gravel from pavement and decommissioning bridges. If one wants paved county roads then one needs a better rural economic development model than ‘bigger is better’. Counties that can afford paved roads are suburban counties with part-time farmers and sprawling urban commuters.
South Dakota walked away from supporting railways. Thus, the feds prudently walked away from supporting South Dakota with Amtrak. Imagine what an Amtrak line from Chicago to the Black Hills would do for tourism. Or imagine tapping into the Amtrak line through Nebraska. South Dakota governors and congressional delegations lacked imagination for generations. None of those small men and women had the vision and grit of Norbeck or Mickelson.
Road engineers lack the wherewithal to build roads that last. Many Roman roads remain in use. Why in heck do we tolerate this engineer-jobs-program. Build it right the first six times. Annual reconstruction is a feature of I-90 between Sturgis and Rapid City. You’d never know that South Dakota has an engineering school in Rapid City.
Moody’s is correct. Invest in infrastructure. But tie hands so we don’t pave roads in depopulating counties.
Yup, put everything off so nothing gets done. Hope you don’t do that with your house like many of my neighbors. They think that if they fix the roof or paint the house their property taxes will go up, so they do nothing. Like our Republican politicians.
Think of it this way. Maybe those depopulating counties would attract more people if they had good roads to get there. Maybe some small towns would grow population if they had schools and housing with air conditioning. Maybe those who live in rural areas should stop producing food for those of you that think they don’t deserve decent roads and bridges to leave the farm or the ranch once in a while. In many rural areas, they tend, clear, and plow the roads themselves.
Those of you that are against infrastructure in any way, shape, or form will always be against it. Wonder why Trump had dozens of tries at “Infrastructure Week” and never got anywhere? It’s a Republican philosophy to let things go domestically so they gave Trump all the military toys he wanted instead.
Well happy and grudz, when will the great state of South Dakota get off its couch and end its total reliance on blue state money?